Government to ‘review’ £60m Nissan X-Trail production package

The Nissan car plant in Sunderland

The Nissan car plant in Sunderland

The usual suspects have been quick to blame Brexit for Nissan's decision to make the next-generation X-Trail in Japan, rather than the UK. However, things have changed since then.

In a letter to Sunderland employees, Nissan said the relentless "uncertainty" engendered by Brexit is not helping it to plan for the future.

Gianluca de Ficchy, the chairman of Nissan Europe, explained the manufacturer's decision by citing business reasons, in particular, the decrease in diesel sales across Europe and "reduced volumes forecast" for X-Trail in Europe.

Nissan has chose to move assembly of X-Trail cars to its global production hub on the island of Kyushu in southern Japan, reversing a decision made in October 2016.

The factory in Sunderland, which was opened to great fanfare by former Prime Minister Margaret Thatcher in 1986, is Britain's largest with 442,000 cars built past year - nearly a third of total production in the country.

The future models planned for the Sunderland plant, the next-generation Juke and Qashqai, are now unaffected.

The Japanese carmaker announced yesterday the vehicle would be built exclusively in Japan, going back on a pledge made two years ago which would have seen it produced at the company's plant in Sunderland in the North East.

He adds that the decision will have "no implications for existing jobs at the plant", but that the additional 741 jobs proposed alongside the decision to manufacture the new vehicle model in Sunderland "will not take place".

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The letter, from business secretary Greg Clark to former Nissan boss Carlos Ghosn, sought to "give full confidence" to the carmaker as it made key investment decisions in the wake of the Brexit vote.

For a start, the X-Trail is a special case.

He said Unite remains "seriously concerned" that "the apprenticeships and additional jobs that come with future investment and which this community so desperately needs will be lost".

Nissan Motor's decision to shelve plans to produce a new model in Britain is fueling concerns about the effects of Brexit.

Nissan dealt another blow on Sunday by announcing it was shifting future investment away from its largest European plant in Sunderland, northeast England, which employs 7,000 people.

Less than two months before Britain's scheduled withdrawal date, the government does not have an approved agreement on the rules, conditions and terms that will replace the 45 years of frictionless trade that came with being an European Union member.

The Government has made bolstering manufacturing linked to Nissan in Sunderland a priority, offering the company £80m in the wake of the Brexit vote in 2016 to safeguard the auto maker's investments in the north east. Diesel cars dropped from a 55% share of the European market - the UK, Germany, Italy, France, Spain - in 2014, to 36% in 2017.

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